Welcome to Curious Business

Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.

It looks like the economy might be roaring back, as I predicted. With the year one-third over, 2010’s running a third over LY. The increase is more than twice what I'd planned. Even lifetime sales are only 15% behind my cumulative plan-to-date. Curio City is growing almost as fast as I had envisioned five years ago – despite the Great Recession! I probably can’t chop the whole five-year deficit this year, but I’m whittling it down.

I’ll plan more aggressively if that number ever turns black. Meanwhile, I’ll enjoy trouncing what I thought was an ambitious top-line plan (15% growth) and focus on protecting my battered bottom line. My planned payroll increase and development expense joined unplanned disaster expenses (floods and theft and banking fees) to cut my year-end bonus by thousands of dollars.

My wonky whole-week accounting system makes May’s targets look weird. Last May had five weeks and this May has four. Beating LY’s sales should be easy enough. Beating plan…not so much. Making a 15% increase with 20% fewer days will be difficult. I ought to put my Excel records on straight calendar accounting. Moving weeks from one month to the next as the calendar drifts throws me off. But I am anal about continuity. And I'm lazy.

One parting number: The 5,000th customer “contest” that I announced on Facebook and in my newsletter will end today if sales keep up their recent pace, and before Monday even if they die back to their historical summer somnolence. (Transaction #5,000 gets free shipping plus a small gift if the customer is an account holder; otherwise the prize goes to the first account-holder to place an order after #5,000 is reached.)

Friday, April 23, 2010

Two busy weeks raised my cash flow back above the waterline. And not a moment too soon, because the dread Chargeback Defender just re-debited the refunded money that they had first debited back in February. Naturally, they’re charging me another $25 for the service. Emails from the Chargeback Defender tie my stomach in knots.

Their emails and web interface are both unintelligible, so I asked a customer service person to translate. Here’s what she told me:

“The first chargeback in the amount of $144.54 was the first initial chargeback from this customer. You disputed this sale and won the case. However when the merchant wins the chargeback case, the customer still has one more chance to dispute the sale. If they decide to dispute again, this comes in as a 2nd chargeback.

“The 2nd chargeback in the amount of $149.43 is the 2nd chargeback coming in from this customer. The reason why the amount was increased is due to the exchange rates. This credit card is outside of the United States.

“The Chargeback Department informed me that they sent out the paperwork and information to you today so you should receive that by early next week. The representative told me that this sale could not be disputed again and that the funds will be given to the customer. I would strongly suggest to call the Chargeback Department once you receive the information in the postal mail to confirm if this can be disputed by you or not.”

Umm…wait a minute. If the cardholder has the final word, why do they even have a dispute process in the first place? I banged out this reply:

“I don't intend to dispute it again. Every time one of these comes back, I get charged another $25. The bank has taken almost as much money in penalties as the thief stole from us ($125 now).

“Neither the cardholder nor the merchant (me) was at fault in this transaction; the card was apparently stolen by a third party in Malaysia, to whom the merchandise was delivered. But it looks like the merchant gets stuck holding the bag even though the bank authorized the transaction.

“I've already proven that we filled the order properly and the shipment was delivered -- albeit to a thief, not to the actual cardholder. The real culprit is the bank that authorized this transaction despite neither the name nor the address matching the cardholder's -- CDGCommerce or Quantum Gateway. The fact that they not only don't absorb the loss, but can charge me $25 on top of it, is very hard to swallow.”

I don’t expect the nice customer service lady to answer my cry of frustration, but it was just yesterday so we’ll see. The appropriate response would be for the bank (with infinitely deeper pockets than mine) to bear the consequences of its own authorization failure and refund the sale, or the fees, or both. Or at least apologize for life being unfair.

Well. (Deep breaths, Ken.) At least the third and smallest chargeback, from Discover, disappeared from the list entirely without ever generating any followup communication. I hope that’s good news and not just another web interface failure. After three months they must be approaching their own statute of limitations.

Sales have been good enough to stymie my bank’s efforts at sinking me. All 48 of the 5-LED Panther Vision camo caps that were backordered from last November sold within two weeks. I’ve already topped my April plan with more than a week left in the month. The top-line numbers that I’ll share next week will look great. The bottom line? Not so much.

Friday, April 16, 2010

You know those three chargebacks I’ve been griping about since February? Each time the bank yanks the money away from me, they fine me $25. Talk about adding insult to injury...I’ve paid $100 in fees so far with potentially $50 more in play. That’s on top of the $105 that was stolen and the other $210 that’s still in limbo.

Those hits have shaved my cash flow as thin as it’s ever been. Right now my available cash exceeds my obligations by a whopping $387 – not counting the aforementioned disputed chargebacks. I can’t even afford to replace the shipping supplies and wrapping paper that perished in the flood.

At least I can postpone buying boxes as long as the customers are on holiday. Wednesday was my first shutout (zero sales) since last August. I expect about one shutout each week from now through August, but I’m especially vulnerable this year with my customary cash cushion depleted. Even though an unexpected large sale yesterday brought some unexpected relief, Curio City will be running on fumes until fall. It takes several thousand gross sales dollars to recover a few hundred dollars in lost profits and we’re coming into the slowest months of the year.

My paycheck just shrank, too. I don’t earn enough to trigger the IRS withholding tables, but my pay does become taxable when merged with Anne’s income. Throughout the past five years I’ve withheld anywhere from 10% to 13.5% according to my best estimate of our actual tax bill. Self-employment tax on Anne’s 1099 income boosted our effective federal tax burden in 2009 to 14.9%. I increased my Curio City federal withholding to an all-time high of 15% effective with today’s paycheck. That was a $14 hit this payday. Ouch. That’s a 12-pack of Harpoon!

Don’t confuse me with a tea-bagging tax whiner, though. Nearly a third of our 2009 income came from unemployment checks. The feds subsidized our COBRA premiums to the tune of about $8,000. The state Medical Security Program has theoretically owed us $1,500 since last November, although they keep finding reasons not to pay it. And just last week FEMA – the poster child for bad government after Hurricane Katrina – sent us a generous check to cover our new water heater and ceiling damage. We collected much more from the feds than we paid them last year. Well, we paid our share back when we made big salaries in the late ‘90s. Now it’s payback time. Long live socialism!

Unfortunately, the party’s almost over for us. Our standard of living will fall when the COBRA subsidy expires next month…it will suffer again when COBRA itself runs out on August 1…and it will crash and burn dramatically when unemployment checks dry up toward the end of this year. Curio City wages are firmly below the poverty line, and Anne’s going to drop out of the mainstream workforce if she doesn’t find a conventional job by June 1. I should use my downtime to figure out how we’re going to get health insurance in the post-COBRA era, but the Health Connector is temporarily not offering individual and small business policies while the insurance companies fight the state over usurious rate increases.

On the bright side, Massachusetts’s unemployment rate fell last month for the first time in three years as the state added over 7,000 jobs. 300,000 Massholes are still unemployed, but economists say that things are picking up and the job market is gaining steam. Will Anne find a job by June, or will she carve a path in the post-employment economy?

Friday, April 09, 2010

My Sunshop Admin site is where all the magic happens. That’s the back door to Curio City where I create all of the store’s content and manage its database.

When I moved to Mochahost four years ago, Admin started logging me out after a few minutes of inactivity. Sometimes I have to log back in as many as 15 times a day. If I’m called away from my computer while writing a product description or editing a template, that work evaporates when I come back and find myself logged out again.

I started complaining about this in 2007. Turnkey (the shopping cart developer) swore that it wasn’t their fault and referred me to my web host. Other Sunshop developers suggested some tricks to make the server obey my will, but none worked. Mocha washed their hands of it and sent me back to Turnkey. Since this was going nowhere during the Christmas season, I dropped the subject.

The next year I asked my developer to pin down the blame. Eric was by then only performing my upgrades because I couldn’t find anybody else. He thought he might know how to solve the timeouts, but he never got around to trying…and then he was gone.

I reopened the subject with Turnkey when another Sunshop user raised the same complaint last year. Turnkey sent me back to Mocha again. Mocha sent me back to Turnkey again. I dropped the subject again.

When my new developer (Brad) performed a version upgrade last month, I asked him to reopen this old wound. He finally found the fault. The server’s PHP.ini file cleans up idle sessions after 24 minutes (not the 5-10 minutes that I’d misperceived all this time). Knowing that it’s definitely Mocha’s fault, I could finally tell them exactly what to change.

They flat-out refused to increase that timeout interval. If I want custom settings, they said, I can upgrade to a more expensive account. Customizing the ini file could destabilize my shared server.

Well, what do I expect for $75 a year? I stay with Mocha because they’re cheap and their server has been reliable since my Spring 2009 site move. When I eventually outgrow shared hosting and need a (virtual) private server, I will look for a company that’s more cooperative.

Meanwhile, I just have to log in whenever I’m inactive for 24 minutes.

Friday, April 02, 2010

March had almost everything: Floods. Theft. Injury. An impossible sales target. A plague of locusts would not have been entirely unexpected.

The bank snatched back the $105.73 that they had restored last week after having taken it away the week before. I can reopen the chargeback dispute and supply “new evidence.” They want a signed proof of delivery. Priority Mail doesn’t require signatures, so I’m just fracked. I give up. The thief wins. Any day now they will surely take away the other $149.43 that they restored, too. Oddly, I still haven’t heard a word about the third chargeback. Maybe Discover intends to run out the clock and grab my $70 at the last minute.

I think that I’ve found all the damage from the first cellar flood. I had to reorder $740 worth of kites and mark my existing ones down to cost; I’ve sold a few, so they aren’t a total loss. I only had $400 worth of outright write-offs. I still need to replace a couple hundred bucks worth of destroyed shipping cartons and gift wrapping paper. You’ll see why I haven’t done that yet when you get to the numbers at the end of this post.

While it was filling our cellar with a couple more inches of water, the second 50-year storm to strike in two weeks also breached our roof. Water dripped from my office ceiling, shorted out the hall light fixture, and left an ugly yellow stain. Our homeowners insurance is worthless, as you’d expect. I applied to FEMA for disaster relief as soon as President Obama declared our county a disaster area. I don’t think they’ll buy us a new roof, but they might reimburse the water heater and possibly loan us money for roof repairs on very favorable terms.

With over 15” of rain we had our wettest March ever, and the second wettest month in records dating back to the 1890s. It was pretty epic.

The Medical Security Program rejected our latest reimbursement application for insurance premiums paid last October through November. We’ve scraped together still more documentation to resubmit for another 9-week wait. If by some stroke of luck MSP and FEMA payments both come through before some fresh financial disaster strikes, we might be able to get a new roof. Otherwise we just have to hope for a long dry spell.

My ankle still hurts after three weeks. I’m wearing a brace now.

Anne’s 11-year-old car needed two new tires to pass inspection. Happily, it did pass.

March sales were actually pretty good if you disregard $2,100 worth of B2B sales in March 2009 and you don’t subtract this year’s $105 theft. Since those things both do exist, the month finished way behind LY.

Sales are still ahead of my planned 15% increase and April’s targets aren’t too daunting, assuming no further disasters. All of those losses really clobbered my bottom line despite the healthy top line. I need to minimize expenses for the rest of this year to repair that. Since I’m already a cheap SOB anyway, the only things I can really do are cancel my website upgrade plans, and possibly cut my own pay. I’m not sure why payroll is growing so disproportionately; it really ought to track income more closely. But I’m not losing sleep over having a little more money in my pocket.